Palm ends higher on output data, rival oils’ gains

JAKARTA: Malaysian palm oil futures closed higher for a second consecutive session on Tuesday, tracking a rise in rival edible oils at the Dalian exchange, with good export and lower production data also lending support.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 33 ringgit, or 0.78%, to 4,258 ringgit ($1,077.97) a metric ton.

“The market is tracking Dalian strength, good export and lower production to further sustain its rally,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract rose 1.03%, while its palm oil contract gained 2.67%. Soyoil prices on the Chicago Board of Trade were up 0.48%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Cargo surveyor Intertek Testing Services said Malaysian palm oil product exports for January 1-25 rose 9.97% compared to a month earlier, while independent inspection company AmSpec Agri Malaysia reported a 7.97% increase.

The ringgit, palm’s currency of trade, strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Oil prices edged down on Tuesday as investors kept an eye on a resumption in supply from Kazakhstan, but price declines were limited as a massive winter storm hit crude production and affected refineries on the U.S. Gulf Coast.

Weaker crude oil futures make palm oil a less attractive biodiesel feedstock.